The push to restore the Glass-Steagall banking act has returned to the U.S. Senate.
Sen. Tom Harkin on Thursday introduced S. 985, which would rebuild the wall that had once separated commercial banking from brokerage and investment speculation. The Iowa Democrat’s bill came on the 80th anniversary of the original 1933 Glass Steagall Act.
The text of S.985 was not posted on the Senate website as of Friday afternoon, but it is believed to resemble HR 129, introduced by Reps. Marcy Kaptur, D-Ohio, and Walter Jones, R-N.C. Their measure has 62 bipartisan sponsors in the House.
Meantime, 20 state legislatures are considering resolutions urging Congress to reinstate Glass-Steagall. Lawmakers in four states -- South Dakota, Maine, Indiana and Alabama – have passed such measures.
This news item was posted on the examiner.com Internet site yesterday...and I thank Bill Gebhardt for today's first story.
We are in the midst of the worst Washington scandal since Watergate. The reputation of the Obama White House has, among conservatives, gone from sketchy to sinister, and, among liberals, from unsatisfying to dangerous. No one likes what they're seeing. The Justice Department assault on the Associated Press and the ugly politicization of the Internal Revenue Service have left the administration's credibility deeply, probably irretrievably damaged. They don't look jerky now, they look dirty. The patina of high-mindedness the president enjoyed is gone.
Something big has shifted. The standing of the administration has changed.
As always it comes down to trust. Do you trust the president's answers when he's pressed on an uncomfortable story? Do you trust his people to be sober and fair-minded as they go about their work? Do you trust the IRS and the Justice Department? You do not.
This op-ed piece by Peggy Noonan showed up in The Wall Street Journal on Thursday...and I found it in yesterday's edition of the King Report.
The leading economies of the industrialized nations may not have a lot in common, but they are all afflicted by this: Inflation is too low.
That was the astoundingly consistent theme out of a range of data released Thursday. Prices rose 1.1 percent over the 12 months that ended in April in Germany, 0.8 percent in France and 1.3 percent in Italy. In the United States, the consumer price index rose 1.1 percent over the last year. Japan reported surprisingly strong first-quarter growth this week as its aggressive new stimulus policies took effect, but that came against a backdrop of continued falling prices; its consumer price index fell 0.9 percent in the year that ended in March.
The below-trend inflation is partly attributable to falling commodities prices, and just as policy shouldn’t overreact when a short-term commodity blip causes inflation, it shouldn’t make the same mistake in reverse. But even excluding food and energy, U.S. CPI was up only 1.7 percent, still below the level of inflation the Federal Reserve is aiming for. And the situation in Europe is particularly worrisome; if the euro zone is going to have any hope of rebalancing its economy without a prolonged depression, it will need higher inflation in core European countries like Germany and France, offset by lower inflation in countries like Greece and Spain. Instead, prices are rising too slowly even in the core, and there is deflation, or falling prices, in Greece.
The biggest conclusion to draw from all of this is that warnings that massive quantitative easing efforts would spark explosive inflation are turning out to be as wrongheaded as can be. In the United States and Japan, central banks now have open-ended policies of printing money to buy assets. But while the money seems to be finding its way into asset markets, such as for stocks and corporate debt, it isn’t being circulated so widely as to drive up prices for consumers.
This article, along with some excellent charts, appeared in The Washington Post on Thursday...and it's courtesy of West Virginia reader Elliot Simon.
From my perspective, the global nature of excesses and fragilities is the most worrying aspect to the current Financial Euphoria. Essentially, the entire world faces acute financial and economic instability. The entire world suffers from a widening gulf between inflating asset prices and mounting economic vulnerabilities. Seemingly the entire world suffers from an increasingly protracted period of near-zero rates, aggressive central bank monetary stimulus and a desperate search for market returns. The entire global financial “system” is an over-liquefied speculative Bubble – stoked by central bankers responding desperately to acute financial and economic fragilities.
As noted above, find a speculative Bubble and there will be an underlying source of monetary disorder. From my perspective, Bubbles are at their core about a self-reinforcing over-issuance of mispriced finance. Major market misperceptions are integral to fueling Bubbles – and these misperceptions are often associated with some form of government support/backing of the underlying Credit financing the boom.
These days, the dynamic of over-issued, mispriced finance is a global phenomenon – the U.S., Europe, Japan, China, Asia and the “developing” economies. The perception that central bankers will ensure ongoing asset inflation is an unprecedented global phenomenon. The collapse in yields and risk premiums in debt markets across the globe is unlike anything I’ve ever witnessed or studied historically. These days, asset inflation, speculation and Bubbles prevail virtually everywhere. Moreover, the gulfs between inflating assets and weakening economic fundamentals seemingly widen everywhere, as Financial Euphoria engulfs debt and equity securities markets around the world. As noted this week by the great market watcher and historian Art Cashin: This market is unlike anything we’ve ever experienced.
Doug's Credit Bubble Bulletin, posted on the prudentbear.com Internet site every Friday, is always a must read...and yesterday evening's edition is no exception. I thank reader U.D. for sending it along.
The "driving boom is over," or so says a new study of American attitudes toward the automobile.
After decades of adding more cars to their household fleet while moving further and further out into the suburbs, Americans are waiting longer to get licensed, driving less and increasingly turning to alternatives such as mass transit or car-sharing programs, according to a new study by the U.S. Public Research Interest Group, or PIRG.
Declaring the boom in automotive transportation "over," the study stresses that, "the time has come for America to hit the reset button on transportation policy—replacing the policy infrastructure of the driving boom years with a more efficient, flexible and nimble system that is better able to meet the transportation needs of the 21st century."
This very interesting CNBC article appeared on their website early in the afternoon on Wednesday...and I've been saving it for today's column. I thank Elliot Simon for bringing it to our attention.
What can be said of Doug Casey? His life and career are the stuff of legend among investors and speculators, especially in the junior resource space.
Doug is a friend and mentor to Chris and I. For over 25 years I've read his monthly missives, devoured his books and attended his workshops. I credit Doug with leading me to my first big score, and imparting enough wisdom to make me see the sense of holding onto that winner as long as it made sense to. The value of that lesson was something that can never be repaid.
Doug was one of the key people, along with my friend "Dave" with whom I credit for arming me with the confidence to leave my comfortable life in the States, family, friends and business partners to experience the broader world and invest and speculate in the frontier markets.
Although he isn't always right, and has been early on many of his calls, his viewpoints are always enlightening and entertaining!
This interview with Doug was posted on the zerohedge.com Internet site on Thursday...and is definitely worth reading.
Late last Tuesday, after months of intense lobbying, and campaigning visits to 47 countries, Roberto Azevedo was confirmed as the next director general of the World Trade Organisation.
Amidst the Queen’s Speech and the resignation of a certain football manager, Azevedo’s appointment barely flickered on the U.K. news radar. Yet it was an event of some significance that could have major implications for the future shape of the global economy.
While less well-known than the International Monetary Fund, the WTO is the most important economic multilateral on earth. With 159 member states, this Geneva-based organisation can be likened to a vast and highly specialised international court, designed to arbitrate on complex trade disputes between governments that come into conflict, so as to keep protectionism in check.
If a nation feels another is unfairly blocking its exports, it complains to the WTO. Ranks of in-house lawyers then interpret international trade rules and issue an independent judgment. If countries found guilty don’t comply, then all members are meant to stop trading with them and close ranks — although it very rarely comes to that.
This story appeared on the telegraph.co.uk Internet site last Saturday...and it's been sitting in my in-box since then, awaiting a spot in today's column. I thank Roy Stephens for his first offering of the day.
Martin Weale, a member of the rate-setting Monetary Policy Committee, warned that more stimulus risked a damaging surge in inflation because price rises have already been higher than the Bank's 2pc target for most of the past four years. The persistent overshoot, he said, “is a constraint on my freedom of action”.
“Failure to damp sufficiently any new shock pushing up on inflation would result in inflation expectations becoming more entrenched. That, in my view, limits the scope we have to support demand at the current juncture,” he told the British-American Business Council Transatlantic Conference in Birmingham.
George Osborne appointed Mr Carney on a ticket of “monetary activism” to help boost growth. The Chancellor has also asked the MPC to investigate how it might use “forward guidance” as an additional tool. But Mr Weale, who has been sceptical about the policy, suggested there is little it can achieve.
This Roy Stephens offering showed up on The Telegraph's website early yesterday afternoon BST.
On May 6, I wrote Europe was in danger of falling into a permanent recession -- a depression.
Now, the European statistical agencies report France joined Italy and Spain's recessions during the first quarter and economic activity across the entire eurozone continued to contract.
The straightjacket imposed by euro-think -- allegiance to a failed experiment in a common currency, ill-conceived and overzealous austerity measures and halting and inadequate labor market reforms -- caused continued economic contraction across the entire eurozone.
This commentary was posted on the upi.com Internet site yesterday...and it's definitely worth your time. I thank Roy Stephens again.
The dismantling of Germany's nuclear power plants will be one of the greatest tasks of the century as the country moves to phase out atomic energy. It will take at least until 2080 to complete the job. But what happens if energy utility companies who own the facilities go bust before the work is done?
When politicians put far too much pathos into their speeches, people should be on their guard -- with a notable exception. There is one issue where no comparison is overinflated and no superlative appears exaggerated: Winfried Kretschmann, for instance -- the governor of the southern German state of Baden-Württemberg and a member of Germany's Green Party -- spoke of "theological timeframes" that now need to be decided upon.
The issue is nuclear waste and its safe disposal. Germany will have to build a storage facility deep underground that can survive the ravages of wars, revolutions and even another ice age. Indeed, the remains of the nuclear age will have to be kept in a final repository for 1 million years -- longer than the human race has existed.
This very interesting and very profound 2-page essay was posted on the German website spiegel.de on Thursday, May 10th. Marshall Angeles sent it to me on the Tuesday...and it's been waiting for a place in today's column.
The Obama administration denounced Russia on Friday for providing Syrian President Bashar Assad's regime with anti-ship missiles, saying the weapons would only worsen a war that Washington and Moscow have been promising to work together on stopping.
Gen. Martin Dempsey, chairman of the Joint Chiefs of Staff, criticized what he called an "unfortunate decision that will embolden the regime and prolong the suffering." He spoke at a news conference after the New York Times reported that Russia recently delivered an advanced version of Yakhont anti-ship cruise missiles to Syria.
"It's ill-timed and very unfortunate," Dempsey said.
Defense Secretary Chuck Hagel also urged Russia to rethink its military aid, saying that the U.S. and Russia both wanted to stabilize Syria after more than two years of civil war but that the Kremlin's military support makes the situation even more dangerous.
If this isn't a clear-cut case of the pot calling the kettle black, then I don't know what is. This AP story, posted on the foxnews.com Internet site yesterday, is a must read for all students of the "New Great Game"...as are the next two stories. I thank Marshall Angeles for his second offering in a row.
Earlier this week, the CIA's Russian outpost was deeply humiliated when (in a calculated move following accusations that the U.S. had not gotten appropriate Russian information on the two Boston bombers, and following the visit of John Kerry whose primary objective was to, unsuccessfully, get Russia to relent on Syria) Russia's FSB exposed and broadcast on live TV the arrest of its agents caught while attempting to recruit a Russian spy.
Back then we suggested to "expect a prompt retaliation by the US" however it turns out Russia was not nearly done with embarrassing the US in what is becoming an obvious campaign to humiliate the US intelligence service, this time by going where very few clandestine operations go, at least during peacetime detente: by publicly exposing the head counterparty US spy.
As The Telegraph reports, "Russia's Federal Security Service has publicly revealed the identity of a man it calls the CIA station chief in Moscow, in what experts say is a serious breach of intelligence protocol."
This Zero Hedge article was posted on their website early yesterday afternoon Eastern Daylight Time...and it's a must read...as is The Telegraph story to which it is linked. I thank 'David in California' for finding it for us.
The CIA has crossed a certain ‘red line’ in professional ethics of intelligence as American spy Ryan Fogle attempted to recruit a Russian agent, an FSB operative told Russia Today.
“In case with Fogle, the CIA crossed the red line and we had no choice but to react observing official procedures,” a representative of the Russian Security Service, the FSB, said in an interview with RT.
The spy story broke earlier this week after it was made public that Fogle – who had worked under the guise of a third secretary at the U.S. Embassy in Moscow – was detained after being caught red-handed trying to recruit a Russian intelligence officer for the CIA. Following the incident he was expelled from Russia.
As early as by autumn 2011, the FSB was aware that the CIA was pursuing a goal to get an informer within the Russian special services, the agent told RT.
This story was posted on the Russia Today website in the early afternoon Moscow time...and it's another offering from Roy Stephens.
Sixty-six percent of Pakistan's 185 million people are under the age of 30 and almost all of them say they are worse off today than when they were 21.
They also say they would rather have a "strong leader" or one with a "strong hand" than a democracy.
Now they have what they wish -- Nawaz Sharif, 63, a former prime minister who was ousted in 1999 in Pakistan's fourth military coup since independence in 1947.
Thus, Pakistan has been ruled by the military for 33 years, or half of its life as an independent nation.
This is upi.com news item is definitely worth your time...and is an absolute must read for all "New Great Game" students. Roy Stephens sent it to me on Wednesday...and I've been saving it for today as well.
This week the Navy will launch an entirely autonomous combat drone — without a pilot on a joystick anywhere — off the deck of an aircraft carrier, the George H. W. Bush. The drone will then try to land aboard the same ship, a feat only a relatively few human pilots in the world can accomplish.
This exercise is the beginning of a new chapter in military history: autonomous drone warfare. But it is also an ominous turn in a potentially dangerous military rivalry now building between the United States and China.
The X-47B, a stealth plane nicknamed “the Robot” by Navy crews, is a big bird — 38 feet long, with a 62-foot wingspan — that flies at high subsonic speeds with a range of over 2,000 miles. But it is the technology inside the Robot that makes it a game-changer in East Asia. Its entirely computerized takeoff, flight and landing raise the possibility of dozens or hundreds of its successors engaged in combat at once.
It is also capable of withstanding radiation levels that would kill a human pilot and destroy a regular jet’s electronics: in addition to conventional bombs, successors to this test plane could be equipped to carry a high-power microwave, a device that emits a burst of radiation that would fry a tech-savvy enemy’s power grids, knocking out everything connected to it, including computer networks that connect satellites, ships and precision-guided missiles.
This op-ed piece showed up on The New York Times website last Sunday...and is another story that had to wait until today's column. It's also had a change in headline...and now reads "Pilotless Planes, Pacific Tensions". It sounds almost benign now...but it's an eye-opener...and a must read. I thank Roy Stephens for sending it.
Defense Against the Psychopath is a documentary excerpted from chapter one of my book; The Art of Urban Survival. It teaches people how to recognize and defend against our society's most dangerous predators, psychopaths.
The first line of defense against these people is acknowledging their existence.
This very disturbing 39-minute video falls into the absolute must watch category. Ever since I was aware of their presence, I run everyone I have medium to long-term dealings with, through this "sociopathic filter"...and, dear reader, you should do precisely the same thing. I thank reader "Steve in Las Vegas" for bringing this first rate educational video to my attention...and now to yours.
1. Andrew Maguire [#1]: "Physical Demand Shows Gold in Massive Bull Market". 2. Egon von Greyerz: "Coming Collapse, Massive Global Debt and the Bernanke Fed". 3. Art Cashin [#1]: "Shorts Being Squeezed and Market May Go Parabolic". 4. Andrew Maguire: [#2]: "Bullion Banks Are About to Exploit Gold and Silver". 5. Art Cashin [#2]: "Money Supply Going Parabolic, Gold and Inflation".
A box containing $625,000 in gold arrived at Miami International Airport early Tuesday but disappeared about an hour and a half later, Miami-Dade police say.
An American Airlines plane arrived at Miami International Airport from Guayaquil, Ecuador, and docked at Gate D3 at 4:42 a.m. Tuesday, according to a Miami-Dade Police Department incident report. A group of employees unloaded the plane -- including the box containing the gold -- and moved it to the other side of the plane about 5:15 a.m.
A tug arrived at the plane from Gate D6, according to the report. It then drove away with the cart holding the plane's cargo at 5:22 a.m. Surveillance video showed the tug continue to D37 before it entered an alley and disappeared from the video.
This story is a couple of days old, but I didn't have space for it until now...and I thank Marshall Angeles for sending it along.
Gold, down 17 percent since January, is poised to lose 20 percent in a year as inflation fails to accelerate and with the worst risks to the global economy waning, Credit Suisse Group AG said.
Gold will trade at $1,100 an ounce in a year and below $1,000 in five years, according to Ric Deverell, head of commodities research at the bank. Lower prices are unlikely to lure more central-bank buying, said Deverell, who worked at the Reserve Bank of Australia for 10 years before joining Credit Suisse in 2010.
“Gold is going to get crushed,” Deverell told reporters in London today. “The need to buy gold for wealth preservation fell down and the probability of inflation on a one- to three-year horizon is significantly diminished.”
This Bloomberg article was posted on their website late Thursday morning MST...and if you believe this 'analyst'...then I have a bridge I'd like to sell you. I thank Ken Hurt for sharing it with us.
Gold bears are dominant again after prices resumed their slump and billionaire George Soros joined investors selling holdings in exchange-traded products that have retreated to a two-year low.
Seventeen analysts surveyed by Bloomberg expect prices to fall next week, with eight bullish and three neutral, the highest proportion of bears in two weeks. The analysts were divided a week ago after gold rebounded as much as 13 percent from the two-year low of $1,321.95 an ounce on April 16. ETP holdings slid 16 percent to 2,207.1 metric tons this year, the lowest since July 2011, data compiled by Bloomberg show.
“The momentum has slowed significantly,” said Jeremy Baker, a senior commodities strategist who oversees about $800 million of assets at Harcourt Investment Consulting AG in Zurich and who forecasts prices may drop as low as $1,200 in six months. “The safe haven has definitely lost its gleam. We are in a declining phase here.”
This Bloomberg story is from yesterday...and another offering from reader Ken Hurt. Along with that bridge, I have some swamp land in Florida for sale as well.
We have tried to balance supply and demand figures in the gold market to answer a 15 year old question - “where is the supply of gold coming from?” In 1998, Frank Veneroso first suggested that it was the Western Central Banks that were supplying the market and we’ve been looking for a smoking gun ever since.
We have published our research several times, but none has got more attention amongst gold-watchers than our two pieces on the activities of Western Central Banks. In the Markets at a Glance entitled “Do Western Central Banks Have Any Gold Left Part II” we surmised that more than 4,500 tonnes of gold was exported by the United States between 1991 and 2012. Further, we postulated that it must have come from the US Government as they would be the only viable provider of metal in this quantity. There is no other seller in the market that could explain the discrepancy in these import/export figures. Let’s review the updated figures and then examine some expert opinions.
This short commentary by Eric Sprott and David Franklin was posted on the sprottgroup.com Internet site yesterday...and is definitely worth reading.
Turkish prime minister Recep Tayyip Erdoğan has arrived in Washington, D.C. for a much-anticipated summit with President Barack Obama. The timing of the visit -- amid reports of chemical weapons usage in Syria and an attack against a Turkish border town by alleged Syrian agents -- will make it hard to talk about anything other than the civil war in Syria.
But some members of Congress want to draw attention to a less-obvious issue. Last month, a bipartisan group of 47 members of Congress penned a letter to Secretaries John Kerry and Jack Lew calling for clarification on Turkey's financial dealings with Iran. Under the initiative of South Carolina Republican Representative Jeff Duncan, the letter expressed deep concerns over Turkey's gold dealings that have helped Iran skirt Western sanctions designed to curtail Tehran's illicit nuclear program.
This short essay was posted in The Atlantic early yesterday morning EDT...and I thank Manitoba reader Ulrike Marx for her first of three stories in a row in today's column.
The leader of South Africa's biggest platinum mining union threatened on Friday to bring Africa's No. 1 economy "to a standstill" and demanded a meeting with President Jacob Zuma, ramping up the rhetoric in an 18-month labor crisis.
The rand, which tumbled to a four-year low against the dollar on Thursday on fears of a strike at Anglo American Platinum (Amplats), extended its slide on concerns about further disruptions to an already struggling economy.
The currency fell as low as 9.4334, its lowest since April 2009 when emerging markets were still reeling from the effects of the global financial crisis.
A protest strike called for Friday by at least two AMCU officials failed to materialize as all workers reported for the morning shift as normal.
This Reuters story was filed from Rustenburg, South Africa...and posted on their Internet site early yesterday morning EDT.
It could have posed as a model scheme to curtail gold imports. In order to stifle India’s appetite for gold, the government has introduced inflation index bonds. The first tranche amounting to around $364 million (R20 billion) is to be introduced on June 4.
Inflation Indexed Bonds (IIBs) are a new category of debt instruments to be introduced in India, where the coupon and principal amount would be linked to the rate of wholesale price inflation with a lag of four months. The authorities have said the objective of introducing such bonds is to channelise savings into productive sources of instruments from unproductive ones like gold.
Slowly but surely, there seems to be an anti-gold campaign that is at play in India. The concerted effort by the Indian government to discredit gold by imposing several curbs, and channelise consumers away from the precious metal, indicates a desperation that has not gone unnoticed by savvy investors.
This very interesting article was filed from Mumbai...and posted on the mineweb.com Internet site yesterday. It's Ulrike's third and final offering in today's column.
Alasdair Macleod chatted with John Butler, author of The Golden Revolution and the Amphora Report investment newsletter.
John briefly details his motives for writing his book, before the discussion moves onto the latest knockdown in gold against the current news stories regarding global demand.
From weak hands to strong, from West to East, from paper to physical, once a floor is found and the physical supply becomes tight, both Alasdair and John agree that the market will then start to clear at higher prices.
This 27-minute podcast, posted on the goldmoney.com Internet site on Thursday, is certainly worth your time. I thank Elliot Simon for digging it up for us.
Fund manager John Butler, interviewed by Max Keiser on "The Keiser Report" on the Russia Today network, remarks that it's "naive," amid all the acknowledged manipulation of markets going on today, to think that the gold market is not being manipulated too. Keiser's interview with Butler begins at the 14:25 mark in the video posted at the youtube.com Internet site...and I thank Chris Powell for wordsmithing the above preamble.
The long-lasting imprint from FDR’s famous “Hundred Days” did not stem from the bank holiday, national industrial recovery act, the farm adjustment act, the Tennessee Valley Authority, or the public works administration.
Instead, it is lodged in the footnotes of standard histories; namely, FDR’s April 1933 order confiscating every ounce of gold held by private citizens and businesses throughout the United States. Shortly thereafter he also embraced the Thomas Amendment, giving him open-ended authority to drastically reduce the gold content of the dollar; that is, to trash the nation’s currency.
These actions did not constitute merely a belated burial of the “barbarous relic.” In the larger scheme of monetary history, they marked a crucial tipping point. They initiated a process of monetary deformation that led straight to Nixon’s abomination at Camp David, Greenspan’s panic at the time of the 1998 Long-Term Capital Management crisis, and the final destruction of monetary integrity and financial discipline during the BlackBerry Panic of 2008.
This longish absolute must read is an excerpt from David Stockman's book "The Great Deformation: The Corruption of Capitalism in America". It was posted on the mises.org Internet site on Thursday...and I thank Elliot Simon for today's last story.
Under pressure from Wall Street lobbyists, federal regulators have agreed to soften a rule intended to rein in the banking industry’s domination of a risky market.
The changes to the rule, which will be announced on Thursday, could effectively empower a few big banks to continue controlling the derivatives market, a main culprit in the financial crisis.
But critics worry that the banks gained enough flexibility under the plan that it hews too closely to the “pre-crisis status.”
“The rule is really on the edge of returning to the old, opaque way of doing business,” said Marcus Stanley, the policy director of Americans for Financial Reform, a group that supports new rules for Wall Street.
The Dodd-Frank Act now exists in name only, as it's basic tenets have been gutted. This is just another, if not the last, brick in the wall for what the bill stood for originally. This article was posted on The New York Times website late on Wednesday afternoon...and I thank reader Clive Sutherland for today's first story.
By the Federal Reserve's own logic about breaking up banks that are too big to fail, it's time to break the Fed apart for the same reasons, according to a blistering analysis by Alex Pollock of the American Enterprise Institute.
Pollock, in a note to American Banker, said St. Louis Fed President Jim Bullard recently laid out four simple ways to determine when a bank is too big and needs to be split up — namely, if its assets are too voluminous, if it's too leveraged, if it has too much short-term funding of longer term assets and if it creates too much systemic risk.
Pollock said the Fed's current operating status could be accurately characterized by the following: It's too big, with over $3.3 trillion in assets, it's too leveraged at 60 to 1, it's extremely short-funded and it's "a frequent contributor through its interest rate and money-printing action of gigantic systemic risk."
"Therefore, it follows pretty clearly from the same logic that we should break up the Fed," said Pollock, former CEO of the Federal Home Loan Bank of Chicago.
All in favour say aye! This story was posted on the moneynews.com Internet site during the East Coast lunch hour yesterday...and it's courtesy of Elliot Simon.
Central banks, including the Bank of England, strayed into “unchartered waters” by cutting interest rates to near-zero and launching billions of pounds of quantitative easing, and they will find the exit “difficult to control”, the IMF said. “The market response [to a rise in interest rates] will be less predictable ... possibly for several months or even years.”
Long-term interest rates could spike as investors dump over-priced bonds and banks could face a fresh round of losses on both their gilt portfolios and loan books as borrowers struggle to meet higher monthly payments, it added.
For the economy more broadly, though, the IMF said the risks were considerable. “The risk is interest rate volatility and overshooting in the adjustment of long-term rates. The potential sharp rise in long-term interest rates could prove difficult to control, and might undermine the recovery (including through effects on financial stability and investment),” it wrote in a policy paper.
It also argued that there was clear evidence of “diminishing returns” in continuing with existing policies like QE. The most effective policy now, it suggested, was “conditional guidance” of the sort used by the US Federal Reserve and under review by the Bank. It has also been championed by incoming Governor Mark Carney.
This news item appeared on the telegraph.co.uk Internet site at 4:00 p.m. BST yesterday...and it's Roy Stephens' first offering in today's column.
First milk, butter, coffee and cornmeal ran short. Now Venezuela is running out of the most basic of necessities , toilet paper.
Blaming political opponents for the shortfall, as it does for other shortages, the embattled socialist government says it will import 50 million rolls to boost supplies.
That was little comfort to consumers struggling to find toilet paper on Wednesday.
"This is the last straw," said Manuel Fagundes, a shopper hunting for tissue in downtown Caracas. "I'm 71 years old and this is the first time I've seen this."
This AP story showed up on the philly.com Internet site yesterday...and I thank Phil Barlett for bringing us the first story of any real importance in today's column.... )
Perhaps for the first time in his political career, Nigel Farage, the scourge of British politics, found himself in retreat on Thursday evening as dozens of protesters hounded him out of central Edinburgh.
The Ukip leader was finally whisked away in a police riot van under a tirade of abuse from a crowd of about 50 young demonstrators – students, anti-racist campaigners and activists in the radical left pro-Scottish independence movement – after being forced to retreat not once, twice or three times, but four times.
Farage was first forced out of the Canon's Gait pub on the Royal Mile after the landlord took fright as the demonstrators disrupted his casual press conference with shouts of "racist", "scum" and "homophobe". Out on the street, as the fingers pointed and taunts escalated, he was rejected by one taxi and turfed out of a second.
This story appeared on the guardian.co.uk Internet site early yesterday evening BST...and I thank reader Bob Visser for sending it along.
The Telegraph has been accused by Spanish newspapers of launching a "brutal attack", succumbing to "Hispanophobia", leading an Anglo-Saxon assault, and otherwise trying to divert attention away from Britain's own lamentable condition. Spanish readers might be comforted to know that we are even more brutal with our own leaders.
Since I was in Madrid last week as a guest of the Spanish government, let me add my half-penny to the debate. Spain has already done all that can reasonably be expected of any nation, enduring its "calvario" with dignity and fortitude. It has slashed internal consumption by 16 percentage points of GDP without triggering a social explosion - "no mean feat", said one minister.
Whether the country proves to be solvent or insolvent by mid-decade depends almost entirely on the future actions of the European Central Bank and the northern creditor powers. Nothing is pre-determined.
Ambrose Evans-Pritchard is on the defence here...and the article from yesterday's edition of The Telegraph falls into the must read category. I thank Roy Stephens for his second offering in today's column.
The European common currency zone has now been in recession for six straight quarters, with three of the bloc's four largest economies now suffering persistent negative growth. Could the Continent's pursuit of austerity be backfiring? German commentators believe the answer is yes.
The European Union statistics office on Wednesday noted that nine of 17 euro-zone member states are now in recession, with France being the newest significant member of that club. Furthermore, the common currency zone, with bloc-wide declines in economic output for six straight quarters, is now struggling through its longest recession ever, worse even than the downturn in the immediate wake of the 2008 financial crisis.
The contraction was not huge; the euro-zone economy shrank by just 0.2 percent in the first three months of this year. And the German economy narrowly avoided recession, posting growth of 0.1 percent. But the situation in large economies such as Italy and Spain, both of which saw contractions of 0.5 percent in the first quarter of this year, is worrisome.
The currency area's persistent stagnation has raised concerns that Europe could be facing a "lost decade" like the one Japan recently lived through. Klaas Knot, head of the Dutch central bank and member of the European Central Bank board, is just one of many significant voices sounding the warning.
This article appeared on the German website spiegel.de early yesterday afternoon Europe time...and once again I thank Roy Stephens for bringing it to our attention.
In a clear warning to Syria to stop the transfer of advanced weapons to Islamic militants in the region, a senior Israeli official signaled on Wednesday that Israel was considering additional military strikes to prevent that from happening and that the Syrian president, Bashar al-Assad, would face crippling consequences if he retaliated.
“Israel is determined to continue to prevent the transfer of advanced weapons to Hezbollah,” the Israeli official said. “The transfer of such weapons to Hezbollah will destabilize and endanger the entire region.”
“If Syrian President Assad reacts by attacking Israel, or tries to strike Israel through his terrorist proxies,” the official said, “he will risk forfeiting his regime, for Israel will retaliate.”
This news item was posted on The New York Times website on Wednesday sometime...and I thank Marshall Angeles for bringing it to my attention...and now to yours.
Warships from Russia’s Pacific Fleet have entered the Mediterranean for the first time in decades. Russia’s Navy Chief says the task force may be reinforced with nuclear submarines, as the country starts building up a permanent fleet in the region.
“The task force has successfully passed through the Suez Channel and entered the Mediterranean. It is the first time in decades that Pacific Fleet warships enter this region,” the Pacific Fleet spokesman, Capt. First Rank Roman Martov told RIA.
The vessels are now heading to Cyprus and will make a port call in the city of Limassol, he added.
The group includes destroyer “Admiral Panteleyev,” two amphibious warfare ships “Peresvet” and “Admiral Nevelskoi,” as well as a tanker and a tugboat.
This article was posted on the Russia Today website early yesterday evening Moscow time...and it's another story from Roy Stephens.
China has limited room to use government spending and policy stimulus to boost its economy, China Premier Li Keqiang was quoted as saying on Wednesday, dashing hopes among some investors that Beijing may take steps to foster growth.
Li was quoted in the state-owned China Securities Journal as saying that though the economy faces considerable headwinds and uncertainty, China should allow market forces to do their work.
"If there in an over-reliance on government-led and policy driven measures to stimulate growth, not only is this unsustainable, it would even create new problems and risks," Li was quoted by the paper as saying indirectly.
His remarks were made at a meeting of the state council, or China's cabinet, on Monday after a series of data showed a recovery in the world's No. 2 economy faltered in April.
This Reuters story, filed from Beijing, was posted on their website in the wee hours of Wednesday morning EDT...and it's a little something I found in yesterday's edition of the King Report. It's definitely worth reading.
Japan’s economy has roared back to life as the radical reflation policies of premier Shinzo Abe drive a surge of consumer spending, but fears are growing that the tumbling yen could set off a broader Asian crisis.
Growth jumped to a 3.5pc rate in the first quarter, vindicating the government’s efforts to break Japan’s deflation psychology and lift the country out of its 20-year ice age. “Abe’s kick start appears to have succeeded,” said Flemming Nielsen from Danske Bank.
Retail sales are soaring as a “wealth shock” electrifies the economy. The Nikkei index has risen has 70pc since November, with foreign hedge funds among the first to jump on the bandwagon.
The weaker yen is already delivering a powerful punch, accounting for almost half the growth. The currency has dropped 30pc against the dollar and China’s yuan since August, and 37pc against the euro.
This Ambrose Evans-Pritchard commentary was posted on the telegraph.co.uk Internet site early yesterday evening BST...and I thank Manitoba reader Ulrike Marx for sharing it with us.
The first interview is with Rick Rule...and it's headlined "This Is What I am Doing With My Own Money Right Now". Next is this commentary by Keith Barron. It's entitled "Premiums Soaring as Massive Run on Gold and Silver Continues". And last is this interview with Citi analyst Tom Fitzpatrick...and it bears the title "Five Incredibly Important Gold and U.S. Dollar Charts".
The seizure of funds of the largest bitcoin exchange, Mt. Gox, was triggered by an alleged failure of the company to comply with U.S. financial regulations, according to a federal court document.
The U.S. District Court in Maryland on Tuesday ordered the seizure of Mt. Gox's funds, which were in an account with Dwolla, a payments company that transferred money from U.S. citizens to Mt. Gox for buying and selling the virtual currency bitcoin.
A copy of the seizure order was provided on Wednesday by a spokeswoman for the U.S. Immigration and Customs Enforcement (ICE), the investigative arm of the Department of Homeland Security.
This article was posted on the pcworld.com Internet site on Wednesday...and I found it in a GATA release yesterday.
Billionaire investor George Soros joined Northern Trust Corp. and BlackRock Inc. in cutting holdings of exchange-traded products backed by gold before a bear market in prices last month, while John Paulson maintained a stake that lost about $165 million in the first quarter.
Soros Fund Management LLC lowered its investment in the SPDR Gold Trust, the biggest such fund, by 12 percent to 530,900 shares as of March 31, compared with three months earlier, a Securities and Exchange Commission filing showed yesterday. Funds run by Northern Trust and BlackRock showed reductions of more than half, according to earlier filings. Paulson & Co., the largest investor in SPDR, held 21.8 million shares, while Schroder Investment Management Group bought 2.1 million.
This Bloomberg story was posted on their website early yesterday afternoon MDT...and it's courtesy of reader Ken Hurt.
In a 13-F release issued by the SEC after market close yesterday, it was reported that Soros Fund Management LLC, founded and chaired by billionaire financier George Soros, significantly increased its gold related holdings, most notably, through the purchase of over $25 million dollars worth of call options on the GDXJ Junior Gold Miners index.
This stunning move by one of the world’s top performing hedge funds, suggests a powerful surge ahead for gold equities. It should be noted, that in the forty years prior to 2010, the Soros Fund averaged a 20% annual rate of return.
This very short posting over at the bullmarketthinking.com Internet site yesterday, is definitely worth reading...and I thank Phil Barlett for pointing it out.
A new report from the World Gold Council shows that central banks bout 109 tonnes of gold in the first quarter.
This was the seventh straight quarter in which they purchased over 100 tonnes of gold.
Central banks held 31,735.4 tonnes of gold as of May 2013. This was up from 31,694.8 tonnes as of April 2013.
According to the WGC, Russia and South Korea were among the biggest buyers of gold.
This businessinsider.com story from yesterday was posted on their Internet site late yesterday morning...and I thank Roy Stephens for sharing it with us.
The US is moving to broaden its 'blockade' efforts of Iran to the movement of pure gold into the Islamic Republic. The US-led embargo of Iranian crude succeeded in slowing the flow of petrodollars into the nation but as Foreign Affairs committee chairman Edward Cohen remarked, there is "no question that there is gold going from Turkey to Iran."
While the official line from US elite such as Bernanke remains that 'gold is not money' it appears that increasingly other nations would disagree, as Cohen admitted, "in large measure what we're seeing is private Iranian citizens buying gold as a protection against the falling value of Iran's currency."
It would seem somewhat self-evident that the US is admitting, by attempting to embargo this gold flow, that outside the US, the Dollar is becoming increasingly irrelevant (see China's gold demand); and that for many countries the petrodollar no longer exists, having been replaced by 'Petrogold'.
This Zero Hedge posting from yesterday was sent to me by Marshall Angeles...and it's worth reading.
China's demand for gold jumped 20% to 294 tonnes in the first quarter of 2013, while global gold demand overall slid 13% thanks to the dramatic rotation of demand from paper to physical. Chinese demand in gold bars and coins grew to 109.5 tonnes - more than double the five-year quarterly average of 43.8 tonnes.
Central banks added 109.2 tonnes of gold to their reserves in Q1 2013, the ninth consecutive quarter of net purchases. But it was the Q1 ETF outflows of 176.9 tonnes, equating to a 7% decline in total gold ETF holdings that obscured the strong rise in investment for gold bars and coins at the retail level. In the face of the huge 'paper' gold ETF outflows, 'physical' gold demand surged to its highest in 18 months...
The charts are incredible...and this Zero Hedge story is a must read...and it's the second story in a row from Marshall Angeles.
The World Gold Council would more properly be called the World Paper Council, Jeff Nielson of Bullion Bulls Canada writes today, since the council facilitates ownership of paper promises of gold rather than ownership of gold itself. In doing so, Nielson says, the council is just a tool of major banks. His commentary is headlined "The World Paper Council" and it's posted at the Bullion Bulls Canada Internet site.
Jeff has it exactly right, of course. As Chris Powell has said on many occasions over the years...the real reason that the World Gold Council exists in its present form, is to ensure that a real World Gold Council never comes to be. I found this story posted on the gata.org Internet site yesterday...and it's worth reading.
Today’s gold market is being defined by two trends: aggressive selling by investors in North America through exchange-traded funds, and aggressive buying by consumers in Asia.
“When the hedge funds and other investment funds turn negative, it just overwhelms the physical demand,” said George Topping, an analyst at Stifel Nicolaus.
Given that April was the most volatile month for gold since 2008, investment demand could wind up being even worse in the current quarter.
The ETF sell-off masked the fact that underlying physical gold demand has been strong. And in the case of China and India, it has been remarkably strong.
This news item showed up on Canada's financialpost.com Internet site late yesterday afternoon...and I thank Roy Stephens for his final offering in today's column.
Gold consumption reflected a strong revival over last year as Indian households flocked retail outlets to purchase gold jewellery owing to a fall in price of the yellow metal. As against a decline of 13% in global demand for gold, India reported a 27% increase in Q1 2013, surpassing China's demand growth of 20%.
While demand for jewellery increased by 15% to 159.5 tonnes as compared to Q1 2012, investment demand witnessed a significant rise of 52% at 97 tonnes in the January to March period this year, said a recent report released by the World Gold Council (WGC). The government on Thursday also slashed the import tariff value of gold to $466 per 10 grams from $472 per 10 grams.
"Demand growth was largely driven by rural households whose incomes benefited from a good late harvest," the report said. A 4% decline in local gold prices over the quarter further prompted jewellery purchase during the wedding season. Gold prices fell by Rs 500 to a one-month low of Rs 26,800 per 10 grams in the capital on Thursday. While domestic prices fell by over 3% during Q1, in April alone, gold prices fell by nearly 18% due to global factors.
This story showed up on The Times of India website early Friday morning IST...and it's definitely worth reading. I thank Ulrike Marx for digging this story up for us.
Market analyst John Rubino remarks on the futility of technical analysis in a manipulated market like gold.
Rubino writes: "When big players with regulatory immunity can move an asset's price -- and can see resistance/support levels and moving averages just as clearly as anyone else -- smaller traders don't stand a chance."
"Fundamentals always win eventually," he adds, and maybe they do, but the question lately on the minds of gold investors may be whether fundamentals always win within the course of a normal human lifespan. As long as many gold investors -- including some very big ones -- buy paper gold, which can be created to infinity, instead of real metal; as long as the gold mining industry is so oblivious to the rigging of the price of its product and does nothing to defend itself; and as long as mainstream financial news organizations have no interest in committing actual journalism, central banks won't have to worry about any threat to their totalitarian power.
Those are the variables on which GATA continues to work.
Rubino's commentary is headlined "The Golden Bull's Eye" and it's posted at the 24hGold.com Internet site.
No surprises here, dear reader, as I've been saying this for years...and Chris Powell's opening preamble above is definitely worth reading more than once. As you have probably already figured out, I found this very short must read essay in a GATA release yesterday.
Amsterdam...March 1637 (Ruyters): The latest Dutch tulip harvest is in, and experts confidently predict another bumper year for tulip growers and tulip investors alike. Billionaire hedge farmer Jon Paulsen is rumoured to have added hyacinths to his multi-strategy offering and has just launched a fund denominated in daffodils. Tulip stocks climbed by a few millimetres, as they are prone to every day if they grow at their normal organic rate; Couleren bulbs rallied another 2 guilders in heavy Antwerp trading; Rosen and Violetten bulbs ended the trading session more or less unchanged, albeit a bit squashed, and at record highs. The market has been further buoyed in recent weeks by a tide of manure issued by the leading tulip advocate Pol Kruygman from his op-ed column in the New Amsterdam Times, ‘Witterings of a Tulip Fanatic’. Kruygman promised to keep the manure coming, whether anybody wanted it or not.
The popularity and rising value of this colourful perennial plant evidently know no bounds and this is surely a golden age that is never likely to end. Future generations will evidently marvel at the effortless wealth on offer to investors committing their capital unreservedly to tulips today. Dutch housewives bedecked in tulip hats, tulip scarves, tulip dresses and tulip shoes danced gaily in the streets of Tuliptown (formerly Amsterdam) whilst smoking tulip cigarettes, slurping tulip soup, and drinking tulip beer from tulip beer glasses with tulip straws. Given that the anthocyanin Tulipanin is toxic to horses, cats and dogs, the inhabitants of Amsterdam have long since stopped rearing horses, cats and dogs; they have chosen to rear tulips as pets instead.
Many Dutch households have also abandoned the traditional export trades in herring, gin and cheese in order to concentrate their energies where the action is: tulips.
That just about sums up the state of economic, financial and monetary affairs of the entire world today. Just add 376 years. This excellent 3-page commentary is from PFP Wealth Management in the U.K...and certainly falls into the must read category...and I thank London, U.K. reader Jonathan Lavy for today's first 'story'.
The Dow Jones Industrial average closed Tuesday at a new all-time high with a triple-digit surge of 123 points.
And it’s fitting that the Dow hit a new high of 15,215 on a Tuesday because it’s the 18th straight Tuesday that the industrials have finished the day higher than where they began. This 18 for 18 streak started all the way back on January 15. The Dow since then is up more than 1700 points. And according to the statistical gurus at Bespoke Investment Group over 1400 of the 1700 plus points gained since then on the Dow have come on, you guessed it, Tuesday. That’s 83 percent of all the gains in stocks since then coming on this one day of the week.
This story was posted on the abcnews.com Internet site shortly after the markets closed on Tuesday...and I found it in yesterday's edition of the King Report.
President Obama announced Wednesday night that the acting commissioner of the Internal Revenue Service had been ousted after disclosures that the agency gave special scrutiny to conservative groups. Attorney General Eric H. Holder Jr., meanwhile, warned top I.R.S. officials that a Justice Department inquiry would examine any false statements to see if they constituted a crime.
Speaking in the White House’s formal East Room, Mr. Obama said Treasury Secretary Jacob J. Lew had asked for and accepted the resignation of the acting commissioner, Steven Miller, who as deputy commissioner was aware of the agency’s efforts to demand more information from conservative groups seeking tax-exempt status in early 2012.
“Americans have a right to be angry about it, and I’m angry about it,” Mr. Obama said. “It should not matter what political stripe you’re from. The fact of the matter is the I.R.S. has to operate with absolute integrity.”
Integrity? What would the president know about that? Just asking. Well, they didn't waste any time picking a fall guy. One wonders what else will develop going forward. This story was posted on The New York Times website last night...and I thank Roy Stephens for his first offering of the day.
Elizabeth Warren is one of the few Senators out there pushing to understand why the federal government has created an untouchable class of criminals in America that can do whatever they want whenever they want and, not only get away with it, but also get bailed out when they make mistakes. Now she has written a letter to Ben Bernanke, Eric Holder and Mary Jo White. My favorite line is: “If large financial institutions can break the law and accumulate millions in profits and, if they get caught, settle by paying out of those profits, they do not have much incentive to follow the law.”
This Zero Hedge piece is short...as is the Elizabeth Warren letter...and I thank Marshall Angeles for sharing it with us.
The economics world has been having a lot of fun with hedge fund managers.
After several such managers at a recent conference denounced the aggressive money-printing policies of Ben S. Bernanke, the Federal Reserve chairman, the economic blogosphere rose up to mock them.
Many hedge fund managers have been predicting that high inflation and fleeing creditors would send interest rates skyrocketing. Stanley Druckenmiller, Paul Singer, J. Kyle Bass and David Einhorn — all big names in the investing world — have warned against the supposedly runaway central banker. Mr. Druckenmiller said that Mr. Bernanke was “running the most inappropriate monetary policy in history.”
This essay appeared on The New York Times website during the New York lunch hour yesterday...and I thank Phil Barlett for sending it.
The Treasury Department on Friday will suspend sales of state and local government Treasury securities until further notice, the first action to avoid hitting the U.S. debt ceiling. The debt ceiling is expected to be reached on May 18, but the Treasury had been expected to take steps like this one in order to keep paying bills. Treasury Secretary Jacob Lew said last week that the U.S. will be able to avoid the debt limit until Labor Day. The Congressional Budget Office said Tuesday that the deadline could be as late as November.
This 1-paragraph story showed up on the marketwatch.com Internet site late yesterday afternoon EDT...and I thank reader "David in California" for bringing it to our attention.
The British Conservative Party has tabled legislation that would guarantee an EU in/out referendum before the end of 2017.
The bill, released on Tuesday (14 May), is expected to be sponsored as a private member's bill by a backbench Conservative MP.
It has the support of Prime Minister David Cameron but will not be tabled as a government bill because of the coalition agreement with the pro-European Liberal Democrats.
The question to appear on the ballot papers is “Do you think that the United Kingdom should remain a member of the European Union?"
This news item, filed from Brussels, was filed on the euobserver.com Internet site yesterday morning Europe time...and I thank Roy Stephens for his second offering in today's column.
Motorists may have paid thousands of pounds too much for their petrol over the last decade, after two of Britain’s biggest companies were raided on suspicion of manipulating oil prices.
MPs and energy experts have raised fears motorists have been “taken for a very expensive ride”, after officials searched the offices of BP and Shell for evidence of price-rigging.
The companies are suspected of distorting the oil price since 2002, meaning drivers have potentially been ripped off for more than 10 years.
European investigators, who raided the London offices of BP and Shell, said the alleged price-rigging could have had a “huge impact” on the cost of oil, including the price of fuel for consumers.
This story was posted on the telegraph.co.uk Internet site late Wednesday evening BST...and it's courtesy of reader "David in California".
José Briá finds it hard to sleep these days. Sometimes when he wakes up in the middle of the night, he drives out to his farmland a few miles from the center of this tiny village just to make sure everything is all right.
He has been robbed three times already this year: Once, chickens were taken. Then, some tools vanished. The last time, eight rabbits disappeared.
The farmers in Albelda have gotten so worried about thieves that they have taken to patrolling their fields at night, their cars bumping along between rows of peach and pear trees. They have found strategic spots that overlook the fertile valley here in northeastern Spain, and from there they peer into the dark, watching for headlights or flashlights, or any signs of intruders.
Such vigilance has helped, they think. But for many, it is a sorry state of affairs. For a long time, many of Spain’s small, isolated farming communities seemed all but immune from the economic crisis. The fields still needed to be plowed and the animals tended. Prices were not that great, but no one was really out of work. Now, however, many of the farmers believe the problem is at their doorstep.
This article was posted on The New York Times website on Tuesday...and it's another story courtesy of Phil Barlett.
The eurozone economy continues to shrink as Germany's economy grew by a meager 0.1 percent in the past three months, while France slid back into recession, according to data from the EU statistics office Eurostat published on Wednesday (15 May).
Shrinking by 0.2 percent in the first three months of 2013, the eurozone economy has now been in recession for the past one and a half years, the longest period since 1995, when Eurostat started collecting the data.
The worst off are Greece - whose economy shrunk by 5.3 percent - and Portugal (-3.9%) compared to the same period last year.
France is also officially back in recession, after its economy shrank by 0.2 percent over the past six months, amid unemployment rates of over 10 percent and low business and consumer confidence.
This news item showed up on the euobserver.com Internet site very late in the afternoon Europe time...and is courtesy of Roy Stephens.
European leaders had hoped to quickly finalize plans for an EU banking union to regulate bank bailouts and provide a roadmap for unwinding insolvent financial institutions. But with the German election looming, Berlin is wary of moving forward. The result could be a lengthy delay.
The pledge was made almost a year ago. European leaders announced in the summer of 2012 that they were working on a plan to break the vicious cycle between the need to prevent banks from collapse and the surge in sovereign debt such efforts caused. In the future, they said, insolvent banks would not be saved by last-second, taxpayer-funded bailouts. Rather, troubled financial institutions would be propped up by a European banking union or they would be unwound in an orderly fashion.
Since then, leaders have been discussing what, exactly, such a banking union should look like. On Tuesday, European Union finance ministers met in Brussels for fresh talks in an attempt to reach agreement on the degree to which bank shareholders, creditors and savers should be involved in bailouts.
This article appeared on the German website spiegel.de yesterday...and it's courtesy of Roy Stephens, of course.
The first one is with Hong Kong hedge fund manager William Kaye...and it's headlined "Gold to Soar as West Enters a Frightening Economic Ice Age". Next is John Embry. It's entitled "This Catastrophic Situation is Entering the Terminal Phase". The third interview is with Dan Norcini...and it's titled "Incredibly Important Developments in Many Key Markets".
Positions held by Commodity Futures Trading Commission Chairman Gary Gensler and CFTC Commissioner Bart Chilton are up for renewal, but so far neither official has had their position renewed, which suggests new blood may come into the agency, said an futures industry official on Wednesday.
In addition to Gensler’s and Chilton’s positions being up for renewal, CFTC Commissioner Jill Sommers is leaving soon, said Walter Lukken, chairman of the Futures Industry Association on Wednesday in Chicago. Sommers has said in interviews she would not leave until the last set of Dodd-Frank financial regulatory rules are in place.
“We may be faced with a set of new commissioners who will oversee a complex set of rules,” Lukken said, regarding the implementation of the Dodd-Frank rules. Lukken spoke to members of the futures industry at a luncheon to discuss the view from Washington.
No loss as far as I'm concerned. If they did have good intentions at the beginning, they just didn't have the gonads to do what was right...or someone told them to toe the line, or else. They, like the organization they work for, are controlled by the CME Group and JPMorgan. This article appeared on the kitco.com Internet site yesterday...and I thank reader "Rocky R" for sending it along.
Europe, says James Turk, founder and chairman of GoldMoney, is in the midst of two crises—one in the banking sector, the other related to economic activity, and capital is needed to solve both. As to the allegedly strong dollar, Turk, in this interview with The Gold Report, suggests comparing it to the price of gold rather than other fiat currencies for a better picture. And the world's newest currency—Bitcoin—has a lot in common with one of the oldest—gold.
This interview with James was posted on theaureport.com Internet site yesterday.
A two-day wildcat strike at Lonmin's South African platinum mines ended on Thursday, but a union official said workers might walk out at larger rival Anglo American Platinum (Amplats) to protest company plans to axe thousands of jobs.
Lonmin shares jumped more than 3 percent after the world's third-largest platinum producer said 86 percent of its workers had reported for duty, easing fears of prolonged unrest at the mine, the epicentre of months of industry turmoil last year that hit growth in Africa's largest economy.
This Reuters story was posted on the mineweb.com Internet site in the wee hours of this morning.
Gold premiums in India, the world's biggest buyer, more than doubled on speculation that government restrictions on bullion imports by banks to rein in a record current-account deficit would reduce supplies.
The fees jewelers pay dealers for bars jumped as high as $40 an ounce today from $17 to $18 yesterday, Bachhraj Bamalwa, a director at the All India Gems & Jewellery Trade Federation, said by phone from Kolkata. The Reserve Bank of India on May 13 limited imports by banks on a consignment basis to only those required to meet the genuine needs of exporters.
The biggest slump in prices in three decades last month led to shoppers crowding retail outlets across India to buy jewelry and coins, deepening concern that the nation's current-account deficit, the broadest measure of trade, would widen from an all-time high. The rush to buy bullion caused a shortage of physical supplies, prompting importers to charge a hefty premium over London prices, according to Bamalwa.
This Bloomberg news item, filed from Mumbai, was posted on their Internet site in the wee hours of yesterday morning Mountain Daylight Time...and I found it a GATA release.
New images of a possible lost city hidden by Honduran rain forests show what might be the building foundations and mounds of Ciudad Blanca, a never-confirmed legendary metropolis.
Archaeologists and filmmakers Steven Elkins and Bill Benenson announced last year that they had discovered possible ruins in Honduras' Mosquitia region using lidar, or light detection and ranging. Essentially, slow-flying planes send constant laser pulses toward the ground as they pass over the rain forest, imaging the topography below the thick forest canopy.
What the archaeologists found and what the new images reveal are features that could be ancient ruins, including canals, roads, building foundations and terraced agricultural land. The University of Houston archaeologists who led the expedition will reveal their new images and discuss them Wednesday at the American Geophysical Union Meeting of the Americas in Cancun.
This interesting item was posted on the foxnews.com Internet site yesterday...and I thank Marshall Angeles for bringing it to my attention...and now to yours.
To commemorate its 40th anniversary last month, Charles Schwab Corp. created an interactive exhibit that is traveling to its major employment centers, including San Francisco, its headquarters and home to 2,300 of its 14,000 workers.
Here's part of the Q&A that appeared in the article...
Q: How do you feel about the robo-traders who have come to dominate stock trading?
A: They add nothing to the marketplace. They are scalpers. In times of crisis they suck out liquidity. They would argue they add liquidity. I don't think so.
Q: What should be done?
A: If I was czar, you would have the real marketplace here and let them go there and play in their dark pools like it's a video game or a lottery. There is no leadership in the SEC to do that. There is no leadership in government to do that. So consequently we have these unbridled frontiers.
This very interesting 2-page story was posted on the San Francisco Chronicle website early on Monday evening...and I found it tucked away in a GATA release yesterday.
High-frequency trading firms increased their campaign contributions to federal lawmakers by 673 percent from the 2008 to the 2012 election cycle, according to a report that sheds light on their political connections in Washington and efforts to impact policymaking.
The report by the Washington-based nonprofit watchdog Citizens for Responsibility and Ethics in Washington (CREW) comes as U.S. financial market regulators mull whether new rules should be adopted to rein in high-speed traders, whom some critics accuse of harming smaller investors.
This Reuters story, filed from Washington, was posted on their website early Monday afternoon...and I found it in yesterday's edition of the King Report. It's definitely worth reading.
Attorney General Eric Holder said on Tuesday that he recused himself from a case involving a Department of Justice decision to subpoena phone records from Associated Press reporters and editors.
Holder also said that the Justice Department has ordered a criminal investigation into the IRS' targeting of different conservative groups applying for tax-exempt status. Holder called it "outrageous and unacceptable." He said the Justice Department and FBI were coordinating to determine if any laws were broken.
On the AP phone probe, Holder said that the leak being investigated was one of the "top two or three" leaks he has ever seen, claiming it put the American people at risk.
Well, he's talking the talk...now let's see if he actually walks the walk. This businessinsider.com news item was posted on their website early yesterday afternoon...and I thank Roy Stephens for sending it our way.
This 6:21 youtube.com video clip is "X" rated for language...however, all the naughty bits have been bleeped out...but I'm sure you're quite good at reading lips by now. It's definitely worth watching...and if you're interested, I'd watch it right away before it gets pulled for copyright reasons. Watch it to the very end. Roy Stephens was kind enough to send it our way.
The impact of the Marketplace Fairness Act (the so-called Internet Sales Tax Bill) which passed the Senate on May 6 received limited coverage in a May 10 Numismaster column. However, it deserves a much more detailed discussion. The negative effect it will have on numismatic and precious metals transactions will be dwarfed by the potentially disastrous economic fallout throughout the U.S. economy.
As former Congressman Jimmy Hayes explained at the American Numismatic Association’s National Money Show in New Orleans last week, the label of “Internet Sales Tax” is completely inaccurate. The bill applies to all forms of remote selling, including by mail, telephone, television, radio and Internet. Nowhere in the bill does the word “Internet” appear.
Here are some of the potential financial pitfalls that lurk if the bill is enacted: The bill enables every jurisdiction that charges sales tax to audit sellers. That includes 45 states, the District of Columbia, 740 American Indian tribes, and thousands of local governments across the country. Maybe a business can absorb the costs of an audit by one or two governments, but what if 20 entities came to audit? Although these audits would be conducted by the state government where the seller lives, the overhead costs of audits could put some smaller sellers out of business.
This essay was posted on the numismaster.com Internet site. West Virginia reader Elliot Simon, who sent me this article and has some expertise in this matter, says it's a must read for all Americans...so, being Canadian, who am I to argue.
Europe's ongoing economic crisis and lasting currency woes are beginning to rapidly erode faith among Europeans in the EU project. That is the result of a new survey undertaken by the renowned Pew Research Center in Washington D.C. and released on Monday evening.
The institute polled 8,000 people in eight European Union member states in March and arrived at some disturbing results. In just one year, the share of Europeans who view the European Union project favorably plummeted from 60 percent in 2012 to just 45 percent this year. Furthermore, only in Germany does a majority continue to support granting more power to Brussels in an effort to combat the ongoing crisis.
"The European Union is the new sick man of Europe," read the survey's opening lines. "The effort over the past half century to create a more united Europe is now the principal casualty of the euro crisis. The European project now stands in disrepute across much of Europe."
This spiegel.de story, filed from Washington yesterday, is worth reading as well...and my thanks go out to Roy Stephens for his third contribution to today's column.
German Chancellor Angela Merkel wanted to ignore the Alternative for Germany. But with the anti-euro party gaining ground, many among her conservatives say it is time to change strategy. They are concerned that the currency heretics could cost Merkel her re-election.
Germany's center-right has long been in a luxurious position. Whereas conservatives across Europe have been struggling in recent years with the rise of right-wing populist parties eating into their base, Chancellor Angela Merkel's Christian Democrats have had little to worry about. Though the German left is splintered among three, or even four, parties, the right is a monolith. There is the CDU, its Bavarian wing known as the Christian Social Union, and its favorite coalition partner, the Free Democrats (FDP).
But this election year is different. With the birth of the anti-euro party Alternative for Germany (AfD), Merkel is facing competition from within her own clientele. Furthermore, though her preferred strategy has been that of maintaining complete silence about the AfD so as not to lend it credibility, there are many in Merkel's party who disagree with that approach. And they are increasingly giving voice to their displeasure.
This is another story from the German website spiegel.de. This one was posted on their website mid-afternoon Europe time...and it's another offering from Roy Stephens.
Luxembourg, one of the EU's smallest but richest countries, has said No to a new law against tax evasion.
Its finance minister, Luc Frieden, told press in Brussels on Monday (13 May): "We won't agree tomorrow to the savings tax directive with an extended use because there's still some need for clarification."
He added: "At the moment we lack precision about a number of questions that need answers … We don't know how this will be written into European law and we're not sure that all the loopholes have been closed, in particular a number of trusts don't seem to be covered."
It also contains a big hole on Austria and Luxembourg.
The two financial centres are exempt from automatic exchange until such time as five non-EU tax havens - Andorra, Liechtenstein, Monaco, San Marino and Switzerland - agree to it as well.
Luxembourg, home to just half a million people, has a GDP per capita which is almost three times the size of the EU average. Its wealth comes mainly from financial services. Its banking sector is worth 22 times the size of its economy.
And you though Cyprus was bad. Luxembourg is far worse. No wonder they're opposed to this new tax. This must read story, filed from Brussels, was posted on the euobserver.com Internet site early yesterday morning Europe time...and my thanks go out to Roy Stephens once again.
The E.U. on Monday (13 May) said many Cypriot banks do not know who their customers really are, but wired Nicosia €2 billion anyway.
Commenting on a recent study on money laundering in the Mediterranean island, eurozone finance ministers said in a joint communiqué that it must do better on "customer due diligence by banks" and must fix "the functioning of [its] company registry."
Dutch finance chief Jeroen Dijsselbloem, who chairs the ministers' meetings, added: "This report shows that while the legal [anti-money-laundering] framework is OK, the implementation is really lacking."
This is another story from the euobserver.com Internet site. This one was filed minutes after midnight Europe time yesterday. It's definitely worth the read...and my thanks to Roy Stephens for his final offering in today's column.
This CNBC Asia video clip with Jim runs for 4:49 minutes...and was conducted on Monday evening in North America...Tuesday morning in Hong Kong. It's definitely worth watching...and I thank reader Harold Jacobsen for sharing it with us.
1. Ron Rosen: "This Key Chart Tells You All You Need to Know About Gold". 2. Egon von Greyerz: "The Move to Global Hyperinflation is Now Accelerating". 3. Richard Russell: "We Are Witnessing Unprecedented Events". 4. William Kaye: "How a Criminal Syndicate of Banks is Raping the Gold Market". 5. William Kaye audio interview Part One...and Part Two. 6. James Turk audio interview. 7. Andrew Maguire audio interview.
Today’s Sprott’s Thoughts relate comments made by Sprott USA Chairman Rick Rule in the May 2013 issue of Bonner & Partner’s Family Office Strategic Review .
“Natural resource speculators know that past uranium bull markets offered some ’explosive’ (pun intended) upside. I have been fortunate enough to experience two uranium bull markets: the 1970s bull market, which saw a tenfold increase in the uranium price and a hundredfold increase in some uranium equities, and the bull market of the last decade, which saw a repeat of the earlier performance. If past is prologue, the stage may be set for a third uranium bull run.
“Conditions have changed so completely since the 1970s that a thorough examination of that market teaches us little that is relevant today. But one thing about the 1970s bull market is instructive -the market collapse was partially caused by two catastrophic plant failures: at Chernobyl and Three Mile Island.
The bull market of the 2000s, he says, gives fodder to the case for higher uranium, because the bear market that preceded it is similar to conditions we experience today.
This commentary was posted on the sprottgroup.com Internet site yesterday...and it's worth your time, if you have some.
The Indian consumer — that’s us — is currently public enemy No. 1. We are apparently responsible for leaving the nation’s balance sheet in a shambles with our insatiable lust for gold.
If [the] government and the Reserve Bank of India (RBI) had their way, anyone spotted buying gold would be flayed. Luckily, we are still not that sort of country.
But both are doing everything possible to punish us. We can’t wear our own jewellery above Rs 1 lakh on an overseas holiday. We can’t buy coins easily. The paperwork at a jewellery store is designed to turn away everyone except the most determined. The higher customs duty intends to make gold prohibitively expensive.
Plus, jewellers are being bludgeoned out of business. They can’t import gold. Gold will be rationed through government-owned banks, which will cater only to “genuine” demand. And they are being threatened with draconian laws.
This must read commentary was posted in The Economic Times of India early this morning IST...and I thank Mumbai reader Avi Raheja for finding it for us.
Accelerating gold imports contribute to the current account deficit, which analysts say is one of the biggest concerns for the Indian economy. The government has tried to curb India's appetite for gold with import duties while the central bank has imposed restrictions on the import of the metal, but buyers don't care. They are actually rushing to buy before the authorities clamp down on gold.
On Monday's Akshaya Trithiya festival, the demand was so high that some jewellers opened their shops at 7 am. People stood in queues for hours to buy coins, bars, and ornaments, hoisting sales to the brisk pace last seen in 2008 when gold prices were half of the current level.
The sudden surge in demand has prompted the World Gold Council to say India's imports this year will exceed earlier estimates of 865-965 tonnes, said the council's managing director, Somasundaram PR.
"Consumers are buying both coins and jewellery. Since coins can be bought on the spot, they are flying off the shelves quickly. Orders for jewellery are being placed which may be delivered at a later date," he said.
This is another story from The Economic Times of India. This one was posted on their website on Tuesday...and I found it in a GATA release.
South African workers of world No. 3 platinum producer Lonmin launched a wildcat strike on Tuesday, halting all of the company's mine operations and reigniting fears of deadly unrest that rocked the industry last year.
The platinum belt towns of Rustenburg and Marikana, which saw a bloody Lonmin strike last year, are a volatile flashpoint of labour strife and tensions are running high with job cuts and wage talks looming.
The share price of Lonmin slid over 6 percent and the rand currency hit 3-week lows, underscoring investor jitters over a potential repeat of the 2012 mines turmoil, which hammered platinum and gold production and triggered credit downgrades for Africa's largest economy.
This Reuters story, filed from Johannesburg yesterday, was posted on the mineweb.com Internet site...and I thank Manitoba reader Ulrike Marx for her first story in today's column. It's worth reading.
Examining U.S. trade data, we were surprised to see that South Africa’s $402 million trade surplus with the United States in January had turned into a $689 million deficit by March. Why?
It turns out the $1.1 billion swing is entirely due to unusual shipments of gold from the US to South Africa in February and March. So far this year, 20,013 kg of unwrought gold, worth $982 million, has left John F. Kennedy International Airport (JFK), in New York, for somewhere in South Africa, according to the US Census Bureau’s foreign trade division. (Unwrought gold includes bars created from scrap as well as cast bars, but not bullion, jewelry, powder, or currency.)
The shipments from JFK were the only unwrought gold to leave the US for South Africa in 2013; another large shipment occurred in September 2012.
This story was sent to me on Monday by reader Federico Schiavio...and I really didn't know what to make of it. But it spread like wildfire on the Internet yesterday...and this is what James Turk had to say about it...
"The Rand Refinery is one of the largest in the world. South Africa used to mine 1,000 tones per year, all of which was refined at Rand Refinery. South Africa now mines less than 1/3rd of that weight. So there is a lot of unused fabricating capacity at the Rand Refinery. Given that the Swiss refiners are working 24/7 and backlogged, it is not surprising to me that someone would send gold to the Rand Refinery for fabricating, whether Krugerrands, kilobars, tael bars or whatever."
"That exports from JFK are rising is not surprising either. The US economy continues to do poorly, so a lot of old jewellery and stuff is being sold for cash, to help make ends meet. So these growing shipments from JFK is just part of the now well-established trend that gold is being shipped from west to east."
This very interesting essay, with some excellent charts, was posted on the qz.com Internet site yesterday...and I thank reader Federico Schiavio for bringing it to our attention.
The Perth Mint of Australia achieved record breaking sales for gold bullion products in April, as lower precious metals prices spurred a huge leap in demand. Silver bullion sales also jumped to the highest level in six months.
The Perth Mint began publicly reporting its monthly gold and silver bullion sales in March 2012, providing a window of insight into demand for physical precious metals. Sales spikes have occurred in September 2012 to coincide with the release of the new designs and last month to coincide with the decline in metals prices.
For the month of April 2013, sales of gold as coins and minted products reached 111,505.06 troy ounces. This amount was more than double the previous month and up by an astounding 534.43% from the year ago period when 17,575.64 troy ounces were sold.
This article is well worth your time and was posted on the coinupdate.com Internet site yesterday...and I thank Elliot Simon for bringing it to our attention.
Portugal will not replicate a deal that allowed Cyprus to sell its gold reserves under its bailout, Bank of Portugal Governor Carlos Costa said on Tuesday, adding that its reserves were unchanged at 382.5 tonnes.
"It is not applicable in Portugal," he told reporters. "What happened in Cyprus (on gold reserves), just like a lot of other things there, cannot be replicated in Portugal."
"If we can say today that the Bank of Portugal is among a small group of central banks with adequate risk provisioning ... is mostly because we have significant gold reserves," Costa said. The value of Portugal's reserves rose 3.6 percent last year to 15.51 billion euros due to gold price fluctuations, but Costa said the actual quantity remained the same.
This Reuters news item was posted on their website early yesterday morning EDT...and I thank Ulrike Marx for digging it up on our behalf.
Consumers will sell the least used gold in five years after prices tumbled into a bear market, curbing a source of metal that typically accounts for about one in every three ounces of global supply.
Refiners will handle about 1,550 metric tons of old jewelry and other discarded metal this year, 4 percent less than in 2012 and the least since 2008, Toronto-based TD Securities Inc. estimates. The amount is valued now at $71.4 billion, from $84.5 billion at this year’s peak. Recycling more than doubled in the decade through 2011 as prices rose to a record. A majority of the 38 analysts surveyed by Bloomberg last month said gold’s streak of 12 consecutive annual gains is over.
“April was the worst month in memory,” said Arthur Abramov, the owner of Manhattan Buyers Inc., a cash-for-gold operator in New York that saw volumes drop to 300 ounces a month from 500 ounces. “A lot of people were shocked, and a lot of people were standoffish about selling.”
This Bloomberg story, filed from New York, was posted on their website late yesterday morning Mountain Daylight Time...and I thank Ulrike Marx for her third and final offering in today's column.